QUOTE (kornchild2002 @ Dec 19 2007, 21:03)

What type of audio input can your receiver handle? Dolby Digital, Dolby Digital Plus, PCM 5.1, PCM 2.0, Dolby TruHD, DTS-HD, DTS-HD Master, DTS, etc. Those are many common formats for DVD and Blu-ray movies. You need to manually adjust the PS3's digital optical audio output to include DTS 5.1 and Dolby Digital 5.1. That should be it after that. Set your receiver to input which ever port you are using for your optical cable. If you are using port 1 then make sure you set the input to port 1.
Just know that you aren't going to get Dolby TruHD or DTS-HD Master output out of the PS3. It will encode those formats on the fly to Dolby Digital (or Dolby Digital Plus) or DTS depending on the lossless format used (ie TruHD can only be encoded to other Dolby soundtracks and the same goes for DTS).
Also note that the PS3 outputs 2.0 audio from the XMB. You need to watch a movie (either DVD, Blu-ray, or off the hard drive) or play a game to get 5.1 surround sound.
In my own theory, the video can be displayed by hdmi cable while seperating audio through adjusting ps3's settings to output its audio through optical output. I wanted this setting because I wanted my audio through hi-fi speakers rather than speaker that comes with TV. I'm hoping this will work and need some help from people who has some expertise on this issue.
In the manual, it says it can handle Dolby Digital Plus, Dolby TrueHD, DTS-HD High Resolution Audio, DTS-HD Master Audio, and DTS. I adjusted PS3's sound settings to Digital Out(Optical) -> activated Dolby Digital 5.1 Ch and DTS 5.1 Ch (Linear PCM 2 Ch. 44.1 kHz and Linear PCM 2 Ch. 48 kHz was already checked as default...I could activated AAC, Linear PCM 2 Ch. 88.2 kHz, and Linear PCM 2 Ch. 176.4 kHz but I didn't because I wasn't sure whether my speakers or receiver can handle it) -> save settings with 'x' button.
My speaker settings are 2 Aperion bookshelf speakers. I have a Yamaha subwoofer but need to buy a mono pin cable to hook it up to the receiver. So, for now, my PS3 should send out an output format that can suit 2 channel. I'm hoping my receiver can pick up one of the two Linear PCM output.
I played around a little bit with my receiver to accomodate the output from PS3... In the front panel I see buttons like multi ch, dvd, vcr/dvr, cbl/sat, game/tv, aux....Lost in so many configurations, I tried dvd with digital input to optical 1(the optical cable is connected to optical 1 input), or game/tv with same optical 1 input.
That's how far I got. Whew~ hooking up these speakers are quite a work! Correct me if I did something wrong in the process, or missing some settings that should be done. I tried my best to provide the detailed information but so much limitations by writing...kornchild2002, thank you for your reply and whoever reply to this post, I appreciate your time as well.